Dispute Over Salary Sparks Unusual Family Dynamic at FTX - Bankruptcy Case Reveals
A new court filing in the bankruptcy case of FTX reveals an unusual family dynamic where a father's influence affects his son's $32 billion crypto giant. The article explores the dispute over salary and the alleged involvement of family members in the business.
Posted 10 months ago in Blockchain
The alleged dispute over Joe Bankman’s $200,000 FTX salary versus his desired $1 million points to an unusual family dynamic at the former cryptocurrency colossus.
“Just wait until mom hears about this.” For any kid, this might not be an appealing set of words for a father to utter. Some version of that warning, though, allegedly played a behind-the-scenes role in how Sam Bankman-Fried’s once-$32 billion crypto giant was run, according to a new court filing in the company’s bankruptcy case.
Bankman-Fried’s dad, Joe Bankman, was paid a $200,000 salary by FTX’s U.S. division, according to the filing from FTX’s bankruptcy estate, which just sued the parents. But that wasn’t enough, he said, telling an FTX executive in a Jan. 12, 2022, message that he was supposed to get $1 million annually starting the previous month, according to the filing.
Then he emailed his son. “Gee, Sam I don’t know what to say here,” he wrote, according to the filing. “This is the first [I] have heard of the 200K a year salary! Putting Barbara on this.” Barbara is former FTX CEO Bankman-Fried’s mom, Barbara Fried.
“Bankman’s influence paid off, not only for him, but for Fried too,” FTX’s bankruptcy estate said in the Monday filing. “Within two weeks, Bankman-Fried gifted Bankman and Fried together $10 million in funds originating from Alameda Ltd. Within three months, Bankman-Fried caused the couple to be deeded a $16.4 million property in The Bahamas paid for with funds ultimately provided by FTX Trading.”
Elsewhere in the document, there’s another assertion that Bankman-Fried’s parents played a key role in his business. As early as 2018, Bankman called Alameda Research – the trading firm Bankman-Fried founded that played a central role in the empire’s demise – a “family business,” a label he used repeatedly, according to the filing.
It was already known Bankman-Fried’s inner circle played big roles at his companies, but this latest revelation suggests an unusual family dynamic – a parent taking advantage of their unique leverage over their child – was also possibly at play. As CoinDesk revealed last year, Bankman-Fried’s roommates were senior executives, including ex-girlfriend Caroline Ellison, who ran FTX’s sister company, Alameda Research.
And, even before the empire’s November 2022 collapse, it was known that Bankman-Fried’s dad was involved with FTX. Referring to the lawsuit brought Monday against Bankman and Fried, their two attorneys told CoinDesk: 'This is a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child's trial begins. These claims are completely false. [John J. Ray III, FTX’s bankruptcy-era CEO] and his massive team of lawyers, who are collectively running up countless millions of dollars in fees while returning relatively little to FTX clients, know better.'
Amitoj Singh contributed reporting to this story. Edited by Stephen Alpher.
Last updated 9/19/2023, 1:35:29 PM
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